Fannie Mae reported on Wednesday that it scored net income of $2.7 billion in the first quarter of 2012, up from a net loss of $6.5 billion a year ago and $2.4 billion in 4Q11. The improvement, said the GSE, was mainly due to lower credit-related expenses stemming from a less significant decline in home prices; a decline in the company’s inventory of single-family REO properties; and improved REO sales prices. Also, single-family delinquency rates are down.

Fannie Mae acquired 47,700 REO properties during the first quarter via foreclosure or deed-in-lieu, but got 52,071 REO properties off its books through sales. For six consecutive quarters now, the company has sold more REO properties than it’s acquired, partly because acquisitions slowed down during the robo-signing mess, but also because dispositions increased rapidly in 2011.

Yet the change isn’t because the housing market is much stronger. The GSE noted that an ongoing weak economy, as well as high unemployment rates, continues to create a high level of mortgage loans that evolve from delinquent to REO status. Foreclosure rates remain high, and were only lower than they would have been because of processing delays caused by changing legislative, regulatory and judicial requirements. So there’s still time for foreclosures to perk up.

Modest signs of life for Las Vegas residential market

In the same way it’s interesting (and maybe instructive) to examine a train wreck, the greater Las Vegas housing market is worth following in some detail to see how much recovery it’s eking out. Turns out that there are glimmers of recovery for the market, which could be a hopeful sign for the rest of the nation’s housing markets.

According to the Greater Las Vegas Association of Realtors on Wednesday, the total number of homes listed for sale on GLVAR’s MLS decreased from March to April, with a total of 17,884 single-family homes listed for sale at the end of the month. That’s down 1.7 percent from the end of March and down 20.3 percent from one year ago, a marked shrinking of inventory.

Even with fewer homes to sell, existing home sales remain ahead of the record pace set in 2011, when GLVAR reported that 48,186 properties were sold in southern Nevada. The total number of local homes, condos and townhomes sold in April was 3,924. That’s down from 4,388 in March, but still up a bit from 3,902 total sales in April 2011.

Spain nationalizes sickly bank

More from Spain: on Wednesday (Thursday in the EU), the Spanish government effectively nationalized the country’s fourth largest bank, Bankia SA. As part of the arrangement, the 4.5 billion euro ($5.9 billion) bailout that the government gave to the bank during 2010 and ’11 will be used to give the government a controlling ownership stake.

Among Spanish banks, Bankia got the worst of it when the residential market in that country collapsed in a way that makes the U.S. contraction look picnic-like by comparison. The upshot of the crisis for Bankia meant that it was stuck with about 34 billion euros’ worth of bad mortgage debt. The move by the government is to shore up the country’s weak banking system, and other announcements are expected by the end of the week, but it’s too soon to know whether they will be useful reforms or like deck-chair rearrangement on a certain doomed ocean liner.

Wall Street had a down day on Wednesday, with the Dow Jones Industrial Average losing 97.03 points, or 0.75 percent. The S&P 500 was off 0.67 percent and the Nasdaq declined 0.39 percent.